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SM Jaleel & Company Ltd – Drinks Manufacturer in Caribbean Analysis

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    SM Jaleel & Company Ltd , affectionately known as SMJ, is one of the oldest and largest manufacturers of nonalcoholic drinks in the English speaking Caribbean. Since their inception in 1924, their wide portfolios of beverages have become household names across the Caribbean, and are currently distributed to over 60 countries worldwide. Their products span a host of carbonated soft drinks, exotic fruit juices, purified and flavoured water, energy drinks, and other fruit flavoured beverages. Every stage of production is owned by the esteemed SM Jaleel & Company Ltd.

    SMJ manufacture its own PET (plastic) bottles, tetra packs (juice boxes), and the cans that their wide variety of products are packaged in. As such, the company enjoys iconic status as the Caribbean’s premier soft drink manufacturer with a reputation for quality, innovation and commercial intelligence. SMJ have been innovative leaders in manufacturing, having pioneered the use of dynamic and advanced technology, systems, and processes in the soft drink industry. They have 25 years of experience in plastic blowing technology which has enabled SMJ’s wide array of PET bottles in different shapes and sizes.

    Their blow molding facility is also the largest in the Caribbean. SMJ was also the first in the world, in conjunction with Reynolds Metal Company, to fill fruit juices in aluminum cans. This was done using Nitrogen technology in the 1980’s, and eliminated the need for artificial preservatives in the product. To ensure consistency in providing high quality products at affordable prices, they have established and facilitated a global network of mutually beneficial partnerships with customers and suppliers.

    In accordance with SMJ’s dedication to quality and consistency, new products have actively been introduced to the market over the past two decades, via ongoing research and development efforts. Presently, SMJ’s products are found in over half a million wholesale and retail stores, including Walmart and other renowned international retailers. Millions consume these products yearly because of this extensive reach. SMJ mission reads as follows; “To always stay one step ahead, constantly responding to an essential human need through thirst quenching, quality beverages and premium water.

    To create products of the highest standards that are priced affordably and distributed efficiently, providing greater accessibility to our consumers. To inspire and motivate our workforce to achieve excellence as a team while promoting their inner sense of self and purpose as individuals. To keep our target market top of mind, as we continue our commitment to improve and enrich the lives of our consumers”. In my opinion SMJ has lived up to their mission statement. They are right on point with each goal their organization placed.

    To further illustrate this here’s a look at their vision statement: “To strive towards being leaders in the non-alcoholic market, making our people the cornerstone of our success, as we work together in a globally-focused, dynamic environment based on trust and sound values, providing all-encompassing beverage solutions that meet the ever changing, evolving needs of our customers”. SMJ has without a shadow of a doubt been leaders in the nonalcoholic beverage industry for the past two decades. They have gone beyond the call of duty in the industry.

    They are pioneers to the Caribbean and even the world’s market in the non-alcoholic industry. This marketing giant in the Caribbean formally known as SMJ has mastered the art of marketing and has captured numerous segments of the non-alcoholic market. They have accomplished this by marketing their products well. Positioning the product is very important. Marketing is about how your firm positions itself to satisfy your market’s needs. There are four critical elements in marketing your products and business.

    They are the four P’s of marketing. 1. Product; The right product to satisfy the needs of your target customer. 2. Price; The right product offered at the right price. 3. Place; The right product at the right price available in the right place to be bought by customers. 4. Promotion; informing potential customers of the availability of the product, its price and its place. Each of the four P’s is a variable that should be controled in creating the marketing mix that will attract customers to the business.

    Marketing mix should be something paid careful attention to because the success of the business depends on it. As a business manager, determining how to use these variables to achieve profit potential is important. This case study introduces the four P’s of marketing and includes worksheets that will help you determine the most effective marketing mix for the business. In this case study we would have observed that SMJ use positioning, marketing mix and the four P’s to bring about success to SMJ. “Product” refers to the goods and services that are being offered to the customers.

    Apart from the physical product itself, there are elements associated with the product that customers may be attracted to, such as the way it is packaged. In terms of packaging SMJ has won over the hearts of many children with its unique patented PET bottle which was designed for the famous drink Chubby. Other SMJ product attributes include quality, options and brand name. SMJ product’s appearance, function, and support make up what the customer is actually buying. Successful managers such as Dr. Aleem Mohammed, Chairman S. M. Jaleel & Co. Ltd. ay close attention to the needs their product bundles address for customers. The products available for sale by SMJ are Carbonated Soft Drinks, Water, Juices FRUTA and Energy Drinks. In the Carbonated Soft Drinks there are a wide array of flavors available. The flavors include; Action Apple, Bubble Gum, Bubbly Cream Soda, Megastar Mango, Merenguito, Purple Power, Rock N Rolla Cola, Sorrel Soda, Tutti Frutti, Kola Champagne, Blueberry Blast, Fresa Strawberry, Go Bananas, Martian Magic, Green Crush, Orango Tango, Pineapple Sunshine, Poppin Pear. These are the flavors which have been made available in the Caribbean.

    In Latin America some additional flavors are available with some being omitted, they include; Fresa Strawberry, Martian Magic Green Crush, Cream Scream Soda, Fruit Punch Soda, Cola Soda, Blueberry Blast, Bubbly, Cream Soda, Go Bananas, Megastar Mango, Merenguito, Orango Tango, Pineapple Sunshine, Poppin Pear, Sorrel Soda, Action Apple, Bubble Gum, Kola Champagne. This shows that SMJ practices what is called market segmentation. They strategically position there products to meet their target audience, by bundling different flavors and in some instances same flavor but different names.

    Product bundle should meet the needs of a particular target market. For example, a luxury product should create just the right image for “customers who have everything,” while many basic products must be positioned for the price conscious consumers. This is demonstrated in my opinion by the availability of FRUTA and Caribbean Cool. Caribbean Cool is the economical re fruit drinks while FRUTA is the luxurious premium brand. For other important aspects of product may include an appropriate product range, design, warranties, or a brand name. Customer research was a key lement in building an effective marketing mix. Knowledge of the target market and SMJ’s competitors allowed them to offer product that will appeal to customers and avoid costly mistakes. Some of SMJ’s target audience includes, Eastern Caribbean, Caribbean, Latin America and Europe. SMJ has launched a fairly new 25% less sugar carbonated drink which is only available to the Eastern Caribbean, suggesting still in the experimental stages. Proper SWOT analysis should be carried out on launching a new product. SMJ has always think long term about their venture by planning.

    This is evident by SMJ’s longevity in the Caribbean, there massive expansion projects and their successful handing over from one generation to the other. SMJ was able to take advantage of opportunities to add value through processing, packaging, and customers. One of their first major successes with packaging was the creation of the PET plastic bottle patented and sold with the name “Chubby”. It is an ideal size not to big attractive to its target audience, mainly children and not to little not too much. Perfect for a child’s lunch kit. SMJ growth occurred in different geographic regions.

    SMJ diversified its product, offering a whole range of nonalcoholic products. The success of this diversification was partly because of SSMJ’s successful acquiring of raw materials, production processes, and distribution which were all done by SMJ, which meant there was no need to acquire new suppliers, skills and equipment, and distribution methods “Price” refers to how much is charged for a product or service. Determining SMJ’s product’s price was tricky and even frightening. Many small business owners feel they must absolutely have the lowest price around. This isn’t always true and depends on your pricing strategy.

    SMJ pricing approach reflects a good image which positions their product well. Example FRUTA isn’t the cheapest fruit drink in the market, yet it is the preferred fruit drink by many customers. The price resulted from their pricing strategy covers the cost per item and includes a profit margin. Lower pricing would make it impossible to grow. As a manager, of SMJ one of the following alternatives pricing strategies may have been used. Selection of a pricing strategy by SMJ was based on the product, customer demand, the competitive environment, and the other products which are offered.

    Cost-plus: Adds a standard percentage of profit above the cost of producing a product. Accurately assessing fixed and variable costs is an important part of this pricing method. Value-based: Based on the buyer’s perception of value (rather than on your costs). The buyer’s perception depends on all aspects of the product, including non-price factors such as quality, healthfulness, and prestige. Competitive: Based on prices charged by competing firms for competing products. This pricing structure is relatively simple to follow because you maintain your price relative to your competitors’ prices.

    In some cases, you can directly observe your competitors’ prices and respond to any price changes. In other cases, customers will select vendors based on bids submitted simultaneously. In those cases, gathering information will be more difficult. Going-rate: A price charged that is the common or going-rate in the marketplace. Going-rate pricing is common in markets where most firms have little or no control over the market price. Skimming: Involves the introduction of a product at a high price for affluent consumers. Later, the price is decreased as the market becomes saturated. Discount: Based on a reduction in the advertised price.

    A coupon is an example of a discounted price. Loss-leader: Based on selling at a price lower than the cost of production to attract customers to the store to buy other products. Psychological: Based on a price that looks better, for example, $4. 99 per pound instead of $5. 00 per pound. After you decide on your pricing strategy, the amount of money you will actually receive may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money you receive. You will also have to decide how to determine: Payment period: Length of time before payment is received.

    Allowance: Price reductions given when a retailer agrees to undertake some promotional activity for you, such as maintaining an in-store display. Seasonal allowances: Reductions given when an order is placed during seasons that typically have low sales volumes to entice customers to buy during slow times. Bundling of products/services: Offering an array of products together. Trade discounts (also called “functional discounts”): Payments to distribution channel members for performing some function such as warehousing and shelf stocking. Price flexibility: Ability of salesperson or reseller to modify price.

    Price differences among target customer groups: Pricing variance among target markets. Price differences among geographic areas:Pricing variance among geographic regions. Volume discounts and wholesale pricing:Price reductions given for large purchases. Cash and early payment discounts: Policies to speed payment and thereby provide liquidity. Credit terms: Policies that allow customers to pay for products at a later date. The methods discussed here should be a base from which to construct your price. The options will vary depending on how the product is sold.

    Since SMJ doesn’t sell directly to the customer they will need to ensure a proper margin is set by the retailer to ensure the success of their products. Tracing the path of SMJ’s product from production to final purchase is a useful exercise to discover this information. The research needed to understand the pricing along the distribution path will be more than worth the time it takes. SMJ’s price ultimately covers costs, contributes to product image by communicating the perceived value of the products, counter the competition’s offer, and avoid deadly price wars.

    Remember, price is the one “P” that generates revenue, while the other three “P’s” incur costs. Effective pricing was important to the success of SMJ. “Place” refers to the distribution channels used to get the product to your customers. What the product is will greatly influence how you distribute it. As a producer, SMJ decided if supplying direct is appropriate for their product, whether it be sales through retail, door to-door, mail order, e-commerce, on-site, or some other method they made the wise decision and choose not to.

    However an advantage of direct sales would be the contact you gain by meeting customers face to face. With this contact you can easily detect market changes that occur and adapt to them. You also have complete control over your product range, how it is sold, and at what price. As a result SMJ has to do extensive market research frequently to keep abreast of the market changes. Reseller Sales (Sales Through an Intermediary) Instead of selling directly to the consumer, SMJ decide to sell through an intermediary such as wholesalers and retailer who will resell SMJ’s product and distribute them.

    This has provided SMJ with a wider distribution than selling direct while decreasing the pressure of managing its own distribution system, additionally, reduction in storage space necessary for inventory. One of the most important reasons for selling through an intermediary is access to customers. Wholesalers want a steady year-round supply of product to distribute. SMJ has a steady year-round supply that is of consistent quality. Market Coverage by SMJ has moved from local and regional in the early nineties to international in the late nineties, through resellers. Intensive, selective, or exclusive coverage Promotion” refers to the advertising and selling part of marketing. It is how businesses let people know what they’ve got for sale. The purpose of promotion is to get people to understand what product is, what they can use it for, and why they should want it. SMJ effective, promotional efforts contain a clear message targeted to a specific audience reached via the appropriate channel. In the case of chubby parents and children is the target audience. Their message is consistent with the overall marketing image, get their target audience’s attention, and elicit the response desired.

    Promotion involve advertising, public relations, personal selling, and sales promotions. Advertising methods to promote SMJ’s product include the following. • Radio: Radio advertisements inexpensive ways to inform potential local customers timing of ad is important. • Television: Television allows access to regional and national audiences, but is more expensive than other options. • Print: Direct mail and printed materials, including newspapers, consumer and trade magazines, flyers, and a logo, fact sheets, contests, coupons, and brochures directly to new or old customers on local, regional, or national levels.

    Currently there are chubby promotions in St Vincent and St Lucia back to School with chubby. • Electronic: Company Web sites provide useful information to interested consumers and clients. • Word of Mouth: Word of mouth depends on satisfied customers which SMJ has had a great track record. Public relations carried out by SMJ ensure that SMJ’s good price effective environmentally friendly Caribbean image is maintained.

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